US close: Stocks higher following July CPI reading

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Wall Street stocks closed higher on Wednesday as market participants digested key inflation data.

At the close, the Dow Jones Industrial Average was up 0.61% at 40.008.39, while the S&P 500 advanced 0.38% to 5,455.21 and the Nasdaq Composite saw out the session 0.03% firmer at 17,192.60.

The Dow closed 242.75 points higher on Wednesday, extending gains recorded in the previous session.

Wednesday's primary focus was last month's consumer price index reading, which revealed the cost of living in the US rose at its slowest pace in over three years last month. According to the Department of Labor, the consumer price index increased at a month-on-month clip of 0.2% at both the headline and core levels, as expected by economists. The annual rate of increase in headline CPI, however, slipped from 3.0% for June to 2.9% in July - its slowest pace since March 2021.

Wednesday's CPI reading comes a day after the Bureau of Labor Statistics revealed that producer prices increased 0.1% to 144.67 points in July, up from 144.53 in June but short of preliminary estimates for a 0.2% month-on-month uptick. On an annualised basis, PPI was up 2.2%.

Elsewhere on the macro front, mortgage applications surged 16.8% in the week ended 9 August, according to the Mortgage Bankers Association, the sharpest week-on-week increase since January 2023. Applications to refinance a home soared 35%, while applications to purchase a home were up a much more modest 3%.

In the corporate space, gambling giant Flutter was in the green after posting Q2 results that came in ahead of expectations, while Mars confirmed that it has agreed to buy Pringles and Cheez-It maker Kellanova in a $35.9bn deal, and Victoria's Secret shares rose after announcing the appointment of its new CEO and posting preliminary quarterly results that came in ahead of previous forecasts.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

American Express Co. (AXP) $243.76 2.00%
Home Depot Inc. (HD) $355.66 1.60%
Travelers Company Inc. (TRV) $214.09 1.52%
Microsoft Corp. (MSFT) $416.86 1.42%
Goldman Sachs Group Inc. (GS) $498.70 1.37%
JP Morgan Chase & Co. (JPM) $210.24 1.11%
Unitedhealth Group Inc. (UNH) $579.67 0.95%
Procter & Gamble Co. (PG) $168.80 0.90%
Walt Disney Co. (DIS) $86.30 0.82%
Walmart Inc. (WMT) $68.66 0.78%